Markets tumble as bailout falters

The Toronto stock market closed deep in the red Friday amid doubts as to whether Greece can muster the political will needed to comply with eurozone conditions that would allow it to secure a muchneeded bailout in order to avoid bankruptcy. The resource-heavy Toronto Stock Exchange was also under pressure following the release of disappointing economic data from China, a major buyer of commodities. The S&P/TSX composite index fell back 108.52 points to 12,389.42 while the TSX Venture Exchange dropped 12.57 points to 1,652.25.

The Canadian dollar was down sharply as traders avoided risky in- vestments and bought into the safe haven status of U.S. Treasuries. The loonie fell 0.72 of a cent (U.S) to 99.72 cents.

U.S. markets were also negative with Dow Jones industrials falling 89.23 points to12,801.23. The NASDAQ index fell 23.35 points to 2,903.88 and the S&P 500 index declined 9.31 points to 1,342.64.

Eurozone finance ministers are insisting that Greece has to save an extra € 325 million beyond what they agreed to on Thursday in order to get a crucial € 130 billion second bailout in time to avoid a bankruptcy next month that could send shockwaves around the financial markets.

Sentiment was also depressed Friday morning by data showing that China’s trade suffered its biggest decline in January since the 2008 financial crisis in a new sign of weak global demand and a slowing domestic economy. Exports fell 0.5 per cent from a year earlier to $149.9 billion, while imports were down 15 per cent at $122.7 billion. The TSX base metals sector led losers, down 1.7 per cent as the March copper contract in New York dropped 12 cents to $3.86 a pound. The TSX energy sector fell 1.3 per cent as the March crude contract on the New York Mercantile Exchange down $1.17 to $98.67 a barrel. April gold dropped $15.90 to $1,725.30 an ounce, pushing the gold sector down almost 1per cent.